This 3-part series on Financing your Dream Log Home was co-written by Greg Ebersole, Mortgage Loan Officer/BB&T and Donald Parsons, Appalachian Log Structures. Mr. Ebersole has over 16 years in the Mortgage Lending field and specializes in Log Home financing. Mr. Parsons has spent the last 23 years assisting several hundred satisfied homeowners realize their dream log homes with Appalachian Log Structures.
What to expect at loan closing and how to get a good appraisal on your custom log home
According to BB&T's Mr. Ebersole “much of the application process can be handled electronically including signing the documentation electronically vs. signing hard copies. During the application process the lender will ask for documentation to support your income (W-2’s paystubs, tax returns) and other documentation needed for the approval process based on each client’s situation.” Additionally, Mr. Parsons add that “this is part of the loan process that can take a lot of time, research and patience. Sometimes additional documents are needed besides the ones listed above or on a list that may be provided from the lending institution. Don’t despair, this happens more frequently than not. Be prepared and have patience while the loan is closing and be quick in responding with the information being asked for”.
A loan will typically take 45-60 days to close from the time the application and all documentation is submitted. There have been instances where the process took longer than 60 days, but this is where patience pays off. Parsons suggests to “ask to be kept in the loop and don’t be shy asking about the status of the loan if the process is taking longer than 60 days. Your mortgage councilor should be able to keep you up to date on the progress.”
One of the biggest unknowns in the loan process is what the appraised value of your finished log home will be based on the independent appraiser’s report. “What is required from the appraisal varies from lender to lender in terms of requirement of log home comparable sales” says Mr. Ebersole. “Many lenders will ask to see 1-3 comparable log home sales to determine the value of the log home. Log homes typically do not resell as frequently as stick-built homes so finding log homes sales can be a challenge.” In these cases, the appraiser will seek to find 3 homes that have sold in the past 6-12 months that are similar in square footage, bedroom & bath count and acreage. The appraiser will also take into consideration the upgrades/amenities going into the home based on the specs that are provided to the appraiser. If you are working with a lender and/or appraiser that is un-familiar with log homes, send them to the Log and Timber Home’s Council web page (www.loghomes.org) where they will find a booklet in .pdf format that describes the process and considerations an appraiser should take when appraising a log home. The booklet was developed in part by Marshall & Swift (which provides the building cost data necessary for real estate cost valuations and is widely considered the authority on the cost approach and the Log and Timber Homes Council. In the past it has assisted many homeowners, appraisers, banks and other financial institutions with getting the proper appraisal on log homes.
When the appraisal is finalized and the loan is closed, you are a step closer to breaking ground and getting your dream log home started. Although this entire process (from getting your FICO and Credit Score to Loan Application/Appraisal/Closing) may take 3 to 6 months, it’s important that during this time that you are designing a home that will fit the budget you’ve set aside. Sharing your budget with both your Loan Officer and Log Home Manufacturer from the beginning will help you stay on target throughout the building process. Although some folks think it unwise to share what their budget is, “it’s the ones that don’t share that typically wind up overextending themselves” says Donald. “The one’s that do share their budget are trusting that the lender, the builder and the log home company are doing their best to guide you in making the right decisions on the size, design and finish of the home so you come in on budget. None of us get a good reference if we don’t!”
When you’re ready to start the financing process of your dream log home, please keep Greg Ebersole and BB&T in mind (Lending in AL, DC, DE, FL, GA, IN, KY, MD, NC, NJ, OH, PA, SC, TN, TX, VA & WV). Although you may have a local BB&T branch in your area, that branch may not have the experience in log home lending that Greg does. To shorten the loan application time, consider calling Greg direct to begin with (717-449-0043). To help you save money on the Financing process, BB&T has a great offer for you. CLICK HERE to learn more about saving up to a $1000 on Lending Fees with BB&T.
And when you are searching to partner with a quality log home manufacturer, give your local Appalachian Log Structures Building Consultant a call or visit one of the 15+ model home locations. You’ll find knowledgeable, experienced and helpful consultants ready to assist you with your dream log home and make it become a reality.